Federation of Thai Industries warns of business woes ahead of minimum wage hike

Federation of Thai Industries warns of business woes ahead of minimum wage hike

A motorcyclist passes a campaign poster of the Pheu Thai Party promoting a minimum daily wage of 600 baht during the 2023 elections. (Photo: Apichart Jinakul)
A motorcyclist passes a campaign poster of the Pheu Thai Party promoting a minimum daily wage of 600 baht during the 2023 elections. (Photo: Apichart Jinakul)

The Federation of Thai Industries (FTI) says businesses will suffer from a surge in operating costs if the government pushes ahead with its plan to raise the daily minimum wage to 400 baht this year.

The Pheu Thai Party, which leads the coalition government, earlier proposed a wage increase to 600 baht a day by 2027, starting with a hike to 400 baht in 2024.

Late last year, the tripartite wage committee, which consists of representatives from the government, employers and employees, resolved to increase the wage by 2.37% on average, or by 2-16 baht per day.

The rate, which has been in effect since Jan 1 this year, was viewed by Prime Minister Srettha Thavisin as being too low for some workers, especially those working in the Deep South.

The premier wants a more reasonable wage rise and suggested the minimum wage could be adjusted more than once a year.

"We want the daily wage to stay unchanged, in line with the tripartite wage committee's decision," said Montri Mahaplerkpong, vice-chairman of the FTI.

The federation warned earlier that a rapid wage increase would have a severe impact on small and medium-sized enterprises (SMEs) amid elevated interest rates and household debt in the country.

Some SMEs may be forced to shutter their businesses, said the group.

The push for a wage hike would have a limited effect on the Thai economy because migrant workers, who benefit from higher pay, tend to spend only 50% of their earnings in Thailand, sending the remainder to their home countries, according to the FTI.

The federation said it is monitoring the possible increase of illegal migrant workers from Myanmar, following the junta government's efforts to reinforce its military conscription plan to deal with an anti-government insurgency.

Many people in Myanmar are expected to enter Thailand to seek jobs and avoid conscription, according to the FTI.

In related news, the federation reported yesterday the Thai Industries Sentiment Index (TISI) in January rose to 90.6 points, up from 88.8 the previous month.

The increase was attributed to higher consumption, as the government initiated the Easy E-Receipt scheme offering tax rebates of up to 50,000 baht and offered a visa-free policy for some foreign visitors, while spending gained in the lead-up to the Chinese New Year festival in early February.

The January TISI was based on an opinion survey of 1,331 entrepreneurs across 46 industry clubs under the FTI. The survey found concerns of a global economic slowdown is the top negative factor, gaining votes of 82.5%, followed by high loan interest rates (73.7%) and fuel price fluctuations (50.1%).

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